BP, Rosneft announce ‘significant’ oil find at Sakhalin-5; 6B barrels estimated

The Associated Press

A joint venture between Britain’s BP and Russia’s state-owned Rosneft oil company announced Oct. 6 the discovery of “significant” reserves of oil and gas at the first exploration well drilled under the Sakhalin-5 project in Russia’s Far East.

The companies said that Elvary Neftegaz, the joint venture that drilled the well at the Pela Lache prospect to the northeast of Sakhalin island, had “encountered significant volumes of oil and gas in a number of high quality sandstone reservoirs.”

The find was a “positive first step toward opening a new area for exploration and subsequent development offshore northern Sakhalin,” the companies said in a statement. The well is the northernmost of all the Sakhalin projects and is located in the deepest waters.

Sakhalin-5 is expected to hold reserves of 6 billion barrels of oil and 450 billion cubic meters of natural gas, according to Dow Jones NewsWires.

BP and Rosneft signed an agreement on sharing development costs in July. BP will cover the estimated US$140 million (euro114 million) of exploration costs, the agency reported.